Finance Fun for “Restricted Funds”

October 16th, 2012

Money that is limited in its use either by an external party or an internal decision.

The money was earned for a specific use and can not be pooled into the operating funds of the College.

As an example, revenue generated by Creations can only be spent on expenses related to the activities related to operating Creations.

What is a restricted fund?

To track revenue and expenses for a particular business or event such as a golf tournament.

To hold money for future use (i.e. field trip).◦ Note: Unlike an operating account, the balance left

in the cost centre at year-end is carried forward for use in the next fiscal year.

To track money donated by an outside source for specific use (i.e. scholarships/bursaries).

Why use a restricted cost centre?

The Account Number…ex. 5-010035-49950

Restricted Funds always start with fund 5.

Restricted fund cost centres always start with 010.

5 - 010XXX

What does a restricted fund cost centre look like?

1. Money earned within a restricted account is subject to the same taxes and Revenue Canada rules as money earned by other operations within the College.

2. Purchases (capital and otherwise) made with restricted funds must follow the College’s purchasing protocols and be approved accordingly.

Things to note about restricted accounts:

The Dean and/or Manager of the department is ultimately the one who requests set-up of a restricted account and approves expenditures from that account.

Often they delegate to the person who is in charge of the operation or event.

Tyler Virostek in Finance looks after the financial end of restricted accounts and can answer any of your questions.

Who is responsible for the restricted accounts?

Ext. 3031Tyler.Virostek@lambtoncollege.ca